Romney and Son Of Boss Tax Scandle

[BigLouie]

[pyramider]

Avoiding taxes is not illegal. Tax evasion is illegal. Not even a good try Louie.

[CJ7]

fictional losses on the other hand are illegal

http://politicalticker.blogs.cnn.com...omment-page-1/

[CuteOldGuy]

Another stupid ad, appealing to the low intelligence of the average American voter. If Obama had anything good to say about his first term, he wouldn't need to stoop to lies about Romney.

He doesn't need to stoop to lies anyway, there's plenty of truth out there about Romney which would deny him the election. The main thing ads like these expose is how stupid Obama thinks you are.

In many cases, he's right.

[I B Hankering]

Originally Posted by CJ7

fictional losses on the other hand are illegal

Fictional allegations, on the other hand, are still lies.


The Obama campaign strikes another low blow with a TV spot accusing Mitt Romney of “personally” approving a notoriously abusive tax-avoidance scheme and suggesting he may have paid “zero” tax. That’s badly misleading.
It wasn’t Romney who was avoiding taxes, it was Marriott Corp. And there’s no evidence to support the ad’s speculation that Romney himself paid no income tax, or that he did something illegal.
The ad opens with an unsupported insinuation that Romney isn’t releasing more federal income tax returns because some would show he didn’t pay any income tax in those years. The narrator asks, “Did Romney pay 10 percent in taxes? Five percent? Zero? We don’t know.” And the narrator might add, “We have no evidence to support what I just said.” But he doesn’t.
Instead, the narrator says, “But we do know that Romney personally approved over $70 million in fictional losses to the IRS as part of the notorious ‘Son of Boss’ scandal. One of the largest tax avoidance schemes in history.” On screen, we see similar quotes attributed to CNN, with the cable network’s logo prominently displayed. There’s so much deceit here we hardly know where to start.

• The tax scheme didn’t benefit Romney, and the fictional losses were not his. The company involved was Marriott Corp, not Romney or Bain Capital. But the ad gives no hint of this.
• CNN didn’t report this. Although the ad prominently features the CNN logo as the source of the printed quotes, they are actually the opinions of two outside tax experts with Democratic leanings.
• Marriott isn’t solely responsible for “one of the largest tax avoidance schemes in history.” Viewers may get the mistaken impression that Romney — actually Marriott — is solely to blame for “one of the largest tax avoidance schemes in history.” Not true. It was a strategy used by many taxpayers that resulted in billions in lost revenue.
• “Avoidance” is not illegal. The casual viewer may miss the important distinction between legal avoidance and illegal fraud or tax evasion. Combining “avoidance” with loaded terms like “scheme” and “notorious” and “scandal” and “fictional losses” further suggests possible tax fraud, but there’s no evidence Romney broke any law.

A viewer who squints hard might see that under the CNN logo, the ad attributes the quotes to an “op-ed” opinion piece by “Canellos & Kleinbard.” And as CNN notes on its site, in fine print, “The opinions expressed in this commentary are solely those of Peter C. Canellos and Edward D. Kleinbard.”

http://factcheck.org/2012/08/obamas-boss-baloney/

[Little Stevie]

So what the Teapublicans are really whining about here is "Please quit using the Son of Boss tax avoidance scam like we used the impossible birther crap without proof for years"!

And just like the birth certificate, Romney has yet to show his tax returns!




Oh, wait! Obama did show his birth certificate but Romney won't show all his tax returns. Hmmm... where there's smoke there's fire!

[CuteOldGuy]

So, you also think it is ok for Obama to base a campaign ad on a verifiable lie. Is that correct Stevie?

[joe bloe]

Liberals are lying scum.

[JD Barleycorn]

Louise needs to cut and paste a new brain and soul. The Son of Boss was already shot resoundingly. All accusations and no proof for something that is not even a crime. Of course the majority of the presidential cabinet has tax problems.

[BigLouie]

Instead of calling names and hurling insults which you seem to like to do a lot why don't you refute this if you can.

Editor's note: Peter C. Canellos, a lawyer, is former chair of the New York State Bar Association Tax Section. Edward D. Kleinbard is a professor at Gould School of Law at the University of Southern California. He is the former chief of staff of Congress's Joint Committee on Taxation.

(CNN) -- Mitt Romney's refusal to release tax returns in the critical years of his income accumulation has done little to dispel the legitimate concern that arises from hints buried in his scant disclosure to date: Did he augment his wealth through highly aggressive tax stratagems of questionable validity?

One relevant line of inquiry, largely ignored so far, is to examine what exists in the public record regarding his attitude toward tax compliance and tax avoidance. While this examination is hampered because his dealings through his private equity company, Bain Capital, are kept shrouded, there are other indicators.

A key troubling public manifestation of Romney's apparent insensitivity to tax obligations is his role in Marriott International's abusive tax shelter activity, as previously reported by Jesse Drucker in Bloomberg.

Romney has had a close, long-standing, personal and business connection with Marriott International and its founders. He served as a member of the Marriott board of directors for many years. From 1993 to 1998, Romney was the head of the audit committee of the Marriott board.

During that period, Marriott engaged in a series of complex and high-profile maneuvers, including "Son of Boss," a notoriously abusive prepackaged tax shelter that investment banks and accounting firms marketed to corporations such as Marriott. In this respect, Marriott was in the vanguard of a then-emerging corporate tax shelter bubble that substantially undermined the entire corporate tax system.

Son of Boss and its related shelters represented perhaps the largest tax avoidance scheme in history, costing the U.S. many billions in lost corporate tax revenues. In response, the government initiated legal challenges that resulted in complete disallowance of the losses claimed by Marriott and other corporations.

In addition, the Son of Boss transaction was listed by the Internal Revenue Service as an abusive transaction, requiring specific disclosure and subject to heavy penalties. Statutory penalties were also made more stringent to deter future tax shelter activity. Finally, the government brought successful criminal prosecutions against a number of individuals involved in Son of Boss and related transactions not associated with Marriott, including principals at major law and accounting firms.

In his key role as chairman of the Marriott board's audit committee, Romney approved the firm's reporting of fictional tax losses exceeding $70 million generated by its Son of Boss transaction. His endorsement of this stratagem provides insight into Romney's professional ethics and attitude toward tax compliance obligations.

Like other prepackaged corporate tax shelters of that era, Marriott's Son of Boss transaction was an entirely artificial transaction, bearing no relationship to its business. Its sole purpose was to create a gigantic tax loss out of thin air without any economic risk, cost or loss -- other than the fee Marriott paid the promoter.

The Son of Boss transaction was vulnerable to attack on at least two grounds.

First, the transaction's promoters and consumers relied on a strained technical statutory analysis. Second, the Son of Boss deal violated the fundamental tax principle that the tax law ignores transactions unless they have a motivating business purpose and a substantial nontax economic effect.

In the Marriott case, the IRS raised both arguments and won on the first interpretive issue.

The Court of Claims (affirmed by the Court of Appeals) rejected Marriott's technical analysis, finding no reliable argument or authority to support it. The court therefore did not need to reach the issue of business purpose and economic substance. In subsequent decisions, involving similar transactions but other parties, the courts have sustained the second line of attack as well, finding the claimed losses to be fictitious.

The complete judicial rejection of the Son of Boss tax scheme was entirely predictable. In mid-1994, for example, roughly contemporaneously with Marriott's execution of its Son of Boss trade and well before Marriott filed its return claiming the artificial loss, the highly respected Tax Section of the New York Bar Association filed a public comment with the U.S. Treasury and IRS urging rejection of the technical claims made by promoters of such schemes.

In his key position as head of the board's audit committee, Romney was required under the securities laws and his fiduciary duties to review the transaction. In fact, it has been publicly reported that Romney was the Marriott Board member most acquainted with the transaction and to whom the other board members turned for advice. This makes sense because aggressive tax-driven financial engineering was a large part of what Romney (and Bain) did for a living. For these reasons, it is fair to hold him accountable for Marriott's spurious tax reporting.

Romney's campaign staff has attempted to deflect responsibility, arguing that he relied on Marriott's tax department and advisers.

This claim is disingenuous. In a transaction of this magnitude, sensitivity and questionableness, the prudent step would be to secure advice to the audit committee and the board from experienced and independent tax counsel, who would certainly have cautioned that the Marriott position was risky and not supported by precedent or proper statutory interpretation.

Moreover, on the key issue of the business purpose and economic substance, Romney was, or should have been, aware of the facts that the transaction had its genesis solely in tax avoidance and was a "marketed" tax shelter.

He had an insider's perspective on the motivation and lack of substance in the transaction, as well as the financial sophistication to understand the tax avoidance involved. Romney failed in his duties to Marriott and its shareholders and acted to undermine the fairness of the tax system.

No one could accuse Romney of lacking the intelligence and analytical skills to have dealt with this transaction appropriately. Indeed, his strengths in this regard were the reason the other board members relied on him.

What emerges from this window into corporate tax compliance behavior is the picture of an executive who was willing to go to the edge, if not beyond, to bend the rules to seek an unfair advantage, and then hide behind the advice of so-called experts to deflect criticism when a scheme backfires.

[pyramider]

If there is a gray area in the tax code accountants have to use it. Romney was not an accountant, and the tax codes are more complex than the NCAA's rules. Again avoidance is not illegal, evasion is illegal.